This article focuses on some ideas for better billing – better in the sense of clarity for the practitioner and the client, and better payment by the client. Billing fairly and efficiently helps lay foundations for an excellent solicitor/client relationship, which can last well into the future and bring a lot of repeat business to your firm.

1. Know the law on giving information about legal charges

   Section 68(1) of the Solicitors (Amendment) Act 1994 provides that, as soon as practicable after beginning a case, a solicitor shall provide the client with a written estimate of fees and outlay or, if this is not possible, outline the basis on which fees will be charged and how this will apply to their particular case.

   You may ask yourself how this legislation helps you with better billing – the answer is that, by getting the hard stuff out of the way up front, the chances of you falling out with your client diminish, and the chances of actually getting paid increase.

   These rules are there to protect the solicitor and the client – by clearly defining the scope of the work and how much it will cost, you will prevent misunderstandings later on.

   Twenty years after this statute has been introduced, there is no excuse for failing to comply. There is a terrific precedent online on the Law Society website. This is a no-brainer, as failure to provide such an estimate amounts to misconduct and takes all the good out of the hard work provided.

   Don’t forget that the beneficiary of an estate is a client (section 2 of the Solicitors (Amendment) Act 1994) and therefore is entitled to a copy of the section 68 letter or contract with the executor (see practice note, Gazette, December 2010, p56).

   For litigators, it is worth remembering that counsel should provide an estimate of costs when receiving a brief and, if you don’t get it, chase it up. The charges should then be something the client is well prepared for and come as no surprise to them.

2. Know the law on billing

   Order 99 of the Rules of the Superior Courts provides the criteria on which the bill of costs is assessed by the taxing master. These criteria can be explained to your client and incorporated into the terms and conditions of your retainer with the client.

   Section 68(8) of the Solicitors (Amendment) Act 1994 provides that, in the event of a dispute about a bill, solicitors must disclose to their clients the client’s statutory rights to:

   • Have the solicitor attempt to resolve the matter,
   • Have their bill of costs taxed, and
   • Make a complaint about the solicitor to the Law Society.

   If your bill isn’t discharged within the time limit you have allowed, then you might consider incorporating a letter informing the client of their statutory rights into your standard correspondence. Many solicitors make a statement of these statutory rights in their standard correspondence.

   Section 68(6) of the Solicitors (Amendment) Act 1994 provides that, at the conclusion of a litigation matter, you should write to your client with a summary of the legal work carried out on their behalf and set out what you recovered in costs, be it on a solicitor/client basis and party-and-party basis. This means that you should, at the end of your case, send the client a copy of the bill of costs detailing what you recovered from the defendant.

   Section 8 of the Solicitors (Amendment) Act 1994 gives power to the Law Society to impose sanctions for shoddy work, including limiting the amount of costs the solicitor can collect for the work done.

   Section 9 of the act gives power to the Law Society to impose sanctions for overcharging, including requiring the solicitor to refund part or all of costs paid by a client, or to waive all or part of the right to recover costs from a client.

   Section 2 of the Solicitors (Ireland) Act 1849 provides that you cannot take steps to recover costs from your client until 30 days after you have served the bill. (It actually says until one month expires. You must serve the client at his address by post – quaintly, it provides that you can serve on his counting house.)

3. Use a written contract

   Section 44 of the Civil Law (Miscellaneous) Provisions Act 2008 allows you to limit your liability to the amount of your insurance cover, provided you let the client know and get them to give their written consent to same (see the Law Society’s ‘Solicitors’ Terms of Business’ precedent (no 24) at www.lawsociety.ie). This will promote better billing, in that you and your client are clear on the terms of your retainer, what is expected of you, what they expect, and also limits your liability. This is good for the client and good for the solicitor.

4. Keep the cash flow going

   It is a well-known economic law that there are only three ways to improve your cash flow:

   • Increase your sales,
   • Decrease your overheads,
   • Increase your collections on what is owed to you.

5. Reduce the cash-flow cycle

   The definition of cash-flow cycle is “the number of days between disbursing cash and collecting cash in connection with undertaking a discrete unit of operations”.

   It is worthwhile taking time to understand the cash-flow cycle. Your firm could be very profitable (thereby attracting even more overheads, including additional taxes), but if you haven’t got a healthy cash flow, you could well find yourself in difficulty, always scrambling for money, and cash starvation could strangle your business. Doesn’t sound logical, does it?

   If you are a personal injuries plaintiff solicitor, you will know all about this. If you are paying for medical reports, stamp duty etc, what is your turnaround time till you get paid? Not 30 days or 100 days: it could be five years – 1,500 days. In the meantime, you have to finance the outlay. Not only outlay, but rates, wages, rent, insurance and so on.

   Many solicitors nowadays ask their clients to pay the outlays as they go. It can be worthwhile taking the time to invest in a credit-card machine, so that payments can be made at the time of appointment or over the phone. The more payment methods, the better the chance of getting paid. Hardly anyone has a cheque book these days!

   If your client cannot make a large payment all at once, you could consider perhaps asking them to put you on a retainer. Where an action goes on for a period of time and the client paid, say, €40 per month (€10 per week), it wouldn’t hurt their pocket too much, but it would mean that the time between your paying the outlay and collection of it would shorten. This does not, of course, cover the cost of your work, but this could be tackled in a similar way.

6. Invoice promptly

   Many of us remember the pearls of wisdom given to us during our training by experienced solicitors. One of these was “always bill while the tear is in the eye”. In other words, issue the bill of costs while the work is current, not months later. If you have to issue an interim bill while awaiting fee notes from other professionals, so be it. Don’t leave it till months or years later. There is a gratitude bell curve that diminishes as time goes on, no matter what kind of splendid job you have done.

   In addition, if you are seen as a professional who is careless about their own accounts and invoices, clients might question giving you future work. You are effectively encouraging the client to hand over the work to a competitor. Clients prefer to get bills promptly. If there are delays, the payment is hanging over them and they can never get rid of the wretched thing.

   If you are requesting an interim payment from a client, for their sake as well as your own, make it clear that it is a request for a payment on account and not a total of the bill to date. This is a very important distinction to make. In the absence of your making this clear, the client is entitled to assume that they are being billed for the work to date.

7. Case-management software

   Many experienced solicitors used to rail against the idea of case management software and ignored it for years, studiously writing up the creation of files in a ledger. Most solicitors are now convinced that they are a big help to the running of their practices. Of course, you only get out of it what you put into it, but it is surprising how much data about a case that this software can throw up. Even where you have a fixed fee agreed, it can be worthwhile giving your client the printout of the activity on the file showing the amount of work that went into their case.

   What case management will also do, if used properly, is provide you with a task system. This will let you input your ‘to-do’ list for each day. Every time you issue a bill, enter a reminder in your tasks to chase it up. Given how busy practice is, it is worthwhile to schedule time in your diary to take care of invoicing and collecting. If it’s possible to delegate this to someone, this is very worthwhile. It is better to separate the ‘operations’ part of your work from the collections part.

   One of the most worthwhile aspects of case management software is the facility of time recording. This is handy for (a) hourly billing, (b) assessing the profitability of work internally, and (c) demonstrating on taxation the level of work that went into a case.

8. A bill of costs

   This will be one of the most useful skills you will ever learn. It puts the control of billing and the timing of it in your hands. If you get really efficient, you can write your bill as you go. You will also give your client clarity and a breakdown of what they have paid you to do.

   The law says that bills have to be drawn in a seven- column format (see order 99 of the RSC) and also that the statute of limitations on complaints doesn’t run until the client has been given a bill of costs in this format.

9. Bill once you have the order

   This is a really important one for litigators. During the course of a case, you will no doubt issue a motion or two and, when you do, you might obtain an order for costs. Sometimes the court will direct that the costs cannot be executed until after the hearing of the main action has concluded. Even so, it is better that the costs of the motion are drawn immediately and served on the other side, so that they can be agreed. If they are not agreed within 30 days, then you can issue a summons to tax. This prevents the costs of motions being rolled into the costs of the main action and thereby being put under pressure to accept an all-in figure.

10. Taxing costs

    The Rules of Court say that costs can be taxed in the following circumstances:

    Party/party costs:

    • On written consent of the parties,
    • When there is an order for costs,
    • On settlement of an action.

    Solicitor/client costs: when a requisition to tax is signed by the client.